KUALA LUMPUR (Oct 30): Educational materials publisher Sasbadi Holdings Bhd narrowed its net loss to RM1.48 million in its fourth financial quarter ended Aug 31, 2023 (4QFY2023) from RM2.25 million a year earlier, largely due to a reduction in provision of inventories writedown where RM3.04 million was recognised in the current quarter as compared with RM3.45 million recognised in 4QFY2022.

Loss per share was 0.34 sen for 4QFY2023 compared with 0.53 sen for 4QFY2022.

Quarterly revenue was flat at RM16.79 million in 4QFY2023 compared with RM16.71 million a year ago.

Nevertheless, the group managed to end its full financial year ended Aug 31, 2023 (FY2023) on an impressive note, with net profit surging 1,110.6% to RM10.18 million from RM841,000 in FY2022. Sasbadi attributed the improved yearly performance to higher sales of its academic books and contracts secured from the Ministry of Education, as well as higher contribution from the digital solution.

It also declared a second interim dividend of 0.25 sen per share for FY2023, payable on Jan 3, 2024.

In a bourse filing on Monday, Sasbadi said its net profit for FY2023 was the highest since FY2017. "This marks an exceptional return for our group despite challenging macroeconomic conditions including rising costs, weak ringgit strength, sluggish retail activity, and conservative consumer spending."

"[It also serves] as a testament that our group has not only fully recovered from the adverse effects of the Covid-19 pandemic, but has performed above and beyond pre-Covid-19 levels. This outstanding improvement is largely attributed to Sasbadi’s ability to make swift responses in this dynamic education landscape even in the face of adversity, further asserting the competitive advantages our group has garnered over its 38 years of existence," it said.

"This outstanding improvement is largely attributed to Sasbadi’s ability to make swift responses in this dynamic education landscape even in the face of adversity, further asserting the competitive advantages our group has garnered over its 38 years of existence," it added.
 
Revenue for FY2023 rose 39.6% to RM96.36 million from RM69.03 million in the previous year. Sasbadi said this was the group's highest full-year revenue ever recorded since its inception.

Looking ahead, Sasbadi said it acknowledges that additional growth must be achieved through fresh sources of revenue.

"A key strategy to achieve this for FY2024 and beyond is through mergers and acquisitions (M&As) that strategically fill niches, which our group has little/no market presence in. By acquiring the right companies, our group can swiftly launch into new business segments with significant market share while improving the acquired companies’ financial performance by leveraging on our group’s competitive strengths, including improved economies of scale, in-house digital capabilities, and efficient, extensive supply chain.

"In an industry where content is king, M&As will greatly expand our portfolio and accelerate our time to market in new business segments, thus spurring inorganic growth in a short span of time," it said.

Sasbadi has also set sights on the early childhood education (ECE) segment from FY2024.

It plans to tap into the huge growth potential of Malaysia’s ECE segment by offering ECE course materials of the highest standard that provide a form of standardisation across kindergartens whilst ensuring specific learning goals are met.

"Besides that, our group has already expanded our repertoire of ECE products suited for the home market (B2C), notably via our exclusive partnership with BOOKR Kids to distribute the BOOKR Class digital library in Malaysia, and the proposed acquisition of a list of IPs from Integra Creative Media Sdn Bhd, a publisher of children's books under the brand Oyez!Books (pending completion).

"We strongly believe BOOKR Class, Oyez!Books, and Peapod Readers will synergise well and form a strong foundation for our group to be a formidable player in the ECE segment in Malaysia," it said.

"Overall, despite our group’s favourable performance in FYE 2023, we believe there is much more room for us to grow and expand, especially when the retail sector recovers. We will focus on diversifying our product offerings to achieve higher growth while upholding the quality synonymous with the Sasbadi brand over the past 38 years. We will continue to monitor our risk management strategies, including cost reduction and cost optimisation measures, which will benefit the group as we strengthen our economies of scale and financial position," added Sasbadi.

The group said it is "cautiously optimistic" about its prospects for FY2024 and beyond.

In separate filings, Sasbadi also announced the appointment of Law En Ruey, 38, the son of group managing director Law King Hui, as executive director of the company effective immediately. This comes as En Ruey's sister Law Yi Chian, who is also an executive director, is taking a one-year sabbatical leave.

Sasbadi added that the board of directors has duly noted and accepted Yi Chian's leave request.

According to Sasbadi, En Ruey started his career in 2008 as a management trainee with AmBank (M) Bhd and was promoted to credit analyst manager in the business credit risk evaluation unit in 2009. He left the bank in 2010 to join Sasbadi Sdn Bhd as a senior manager where he was responsible to assist the managing director in the management of projects, operations and information technology (IT) of the company. In 2011, he was promoted to general manager of the group.

In 2013, he was promoted to chief operating officer (COO) of Sasbadi Sdn Bhd. In 2014, he played an important role in the group's initial public offering exercise and contributed to the successful listing of the group on the Main Market of Bursa. He stepped down from the position as COO in February 2015.

In 2015, En Ruey joined Ipsos Business Consulting (now known as Ipsos Strategy3), the strategic consulting arm of the multinational Ipsos Group SA as a consulting manager. In 2018, he founded Eigis Consulting, a business and IT consulting firm, which is well-known in the Malaysian steel industry, added Sasbadi.

Sasbadi shares closed unchanged at 17 sen on Monday, with 408,900 shares traded. Its market capitalisation stood at RM73.73 million. Year to date, the counter has risen 41.7%.